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Any chance toll milling will be mentioned in the next PR show from Mark Child, think its due today unless I'm mistaken?
Perhaps the toll milling deal suggested is one of 50:50 in terms of profit, plus share options for Calibre exercisable in 2023 at £2 ;--))
I did read the comments from book5 and from memory he was saying something about a senior military officer taking an interest and the land issues being sorted by this guy. I think he said he needed to confirm the information with his usual source. Anyway it sounds as if things are happening on site and let’s hope good news is on its way. The sp held rock steady all day on a tight spread 45/46 on volume of 185000 which was interesting.
We know Book5 contact has a reasonable set of eyes on the ground and confirms that Condor are cracking on implying a very high expectation of things falling into place, how soon we do not know but i would like to hope some big news will come this month. For book5 to redact comments implying a toll milling is quite interesting. If the toll milling comes together with these preparations now completed we have probably reduced the lead time by a few months potentially. Personally it would make more sense to be doing these works in preparation for toll milling because the lead time for a mine build could be 6 months before it arrives on site and that normally offers plenty of time to clear the site and improve roads. However with toll mining it could be much sooner. Lets hope Book5 has enough info to complete the puzzle and we get some confirmation as this toll agreement has been bubbling along almost for 12 months or more. Could be a good few weeks.
tester123 - Don't suppose you chatted with book5 about the posts he made on the other BB around 5PM today, which he subsequently removed and instead posted the cryptic: "_edited till rumours are confirmed"?
CNR have already built an access road for the plant off the main highway into the plant construction area...thats called shovel ready....as for the trees condor have a nursery with several thousand growing all part of there esg....condor are doing lots of things way before a mine decision they have to show they mean buisness...they can not be seen to be given out millions of pounds to one land owner when they have paid a lot less to other landowners .. some owned there own houses ...it would not go down well in the community's..thats probably why mark is trying to sort them some other land out
I had a chat with book5 - apparently CNR have already built an access road for the plant off the main highway into the plant construction area.. And I dont really think a company would do that unless they knew for absolute certain that the project was going ahead.. and locals have been employed for the tree planting program to replace trees that were cleared during the construction area prep etc.. again, why would they do that if it wasnt even going to happen..
regards
T123
Dacostad that is my point entirely. We have good grades elsewhere, though not as open-pittable as La India. We have 95% of La India anyway, so presumably have the land for all the processing plant etc. More drilling at Cacao is likely to produce further reserves, again possibly near surface? So are we in the last stages of a) Take the tolling deal Calibre and/or b) take the land deal guys......as we will crack on with a plan not yet openly spoken about, as we have everything else in place.
Artisanal miners can further deplete their asset/earnings and Calibre can do a deal with us later, but at a much increased price.
BD - interesting point - the figures included a 6% NSR but were pre tax.. but as you say quite rightly, CNR should be able to offset their exploration costs/losses to date ($60M perhaps I seem to recall??) as deductible against future profits - so possibly yes, they could keep the $22M a year initially, perhaps even most of the $75M profit as well... assuming a 30% corp tax rate..
Again. I know the land issue is on everyones mind, but say it takes even $5M to buy the rest of the land.. with profits of $75M from a starter pit on La India alone, its a no brainer - thats why I think MC says he is running the project as if they have 100% land already..
Calibre made $80M profit last year, minus $15M debt payback to B2Gold, so net cash of c.$64M and they are currently a $400M MC company.. p/e ratio of 7 roughly, which is a fair average for other gold producers as well..
If Condor produces 120koz in their first year, at say $150M profit before tax, minus 30% with perhaps $50M debt for the plant build (plus the $60M exploration costs tax deductible) .. Even if they were to pay back ALL OF the debt in the first year, they could still make net cash of $70-90M in the first year alone.. If their p/e was 7 like Calibre, the MCap would be $500-600M. At 150M shares, thats $3.30-$4 a share, or £2.30-£2.80.
The market is currently completely discounting that this plant will ever be funded / built, to me, thats why the SP is so low... But I think thats also why JM just bought another $2M here as he knows, come hell or high water, that he and MC are going to build this thing.. I mean the guy could probably loan CNR the build money himself if he really wanted to, if every other option to borrow money failed - and we know they wont, as MC has repeatedly said that several banks want to finance this project - in a low interest rate world thats awash with money, why wouldnt they...
regards,
T123
Ok so apologies but this is where I get slightly confused.....we own 95% of the land at La India, but do we own 100% of the land at Mestiza, America and Cacao? If so going back to the point by Awax why can't we finance against the gold there? We can still site the plant in La India because in theory we own 100% of the 95% if you get my drift. Perhaps that is why MC has said all the way along the final piece of land is not an issue?
Awax, it all depends on whether we can get finance without owning all the land.
As the miners delaying our complete buy-out of land at La India, why not just build the plant and process Mestiza & Americas ore, then add in Cacao? Sort of calling everyone's bluff?
Maybe these negotiations just take longer than we expect. I know it's a bit different, but didn't it take a year for calibre to buy b2golds mines? It is probably more complicated if calibre then want to buy us.
maybe calibre not interested because of the waste.. maybe they have enough waste to fill there tailings storage facillity without filling it with condors
Interesting points tester. I hadn't realised a toll mining deal could potentially mean that much to Calibre's bottom line. It's easy to forget that they're not really that big in the grand scheme of things. They may also struggle to buy Condor at the price we would want.
Personally, I've given up hope of a toll deal ever materialising. If there was a deal to be made it would surely have been done by now. That said, a 50/50 profit sharing deal is so obviously a win for everyone, it's really hard to see why it hasn't happened. Either someone somewhere is being too greedy or as you say, there's other considerations at work.
Which keeps bringing me back to the elephant in the room. What are Rio's intentions in all this? Surely they didn't get into bed with Calibre without a lot of due diligence and a long-term game plan? So what is it and how long will it take to come to fruition?
The Toll Milling scenario is an interesting one.. I wanted to run some numbers on that to see what kind of decision CNR/MC might be facing, and what it could mean for Calibre as well..
In the La India Open Starter Pit alone - they have two scenarios. 1) Lower grade, at 0.75g/t gold cut-off grade, 635Kt at 3.32g/t gold for 67,800 oz gold with a 4.5 to 1 strip ratio. 2) Higher grade, using 2.0g/t cut-off grade, 445Kt at 4.17g/t gold for 59,700 oz gold with a 6.8 to 1 strip ratio.
At an $1800 gold price - the profits (i.e after mining costs) from these small pits alone would be $75M before tax for 635kt lower grade scenario and $66M for 445kt scenario (high grade only). These are pre-tax figures.
If CNR was to agree a 50/50 profit share toll deal on this with Calibre, at 40koz per year, Condors share would be $22M before tax. 30% tax would bring that down to $15M a year.
If they wait and put it through their own plant in say 2 years time, they would keep the full $75M minus 30% tax, i.e $52M profit. This is just for La India pits, not even Mestiza/America.
I think thats the conundrum they have - Do they want $15M profit per year over next 18 months - 2 years, or do they want to wait and have the whole $52M for themselves when they start their own plant.. thats where JM and MC disagree I think, as MC wants the cash now.. JM wants to keep the $52M profit and then take it in 2 years time for the company as a whole...
But this also shows that a deal for Calibre could be worth an extra $15M to their bottom line per year.. For a company that made a net profit in 2020 of $64M, thats a 20-25% uplift to their cashflow.. it seems like a no-brainer, unless, like CNR they are in this for the long game and want to buy CNR cheaper so they also can have the $52M total profit from that single starter pit alone!
regards
T123